BMW doesn’t discount lower headline 2008 pre-tax profit

  • Business
  • Wednesday, 19 Mar 2008

MUNICH: BMW, the world’s largest premium carmaker, did not exclude the possibility that headline pre-tax profit would decline this year amid ongoing high raw material costs and foreign exchange headwinds. 

The company said yesterday earnings before tax should rise above last year’s adjusted 3.78 billion euros (US$5.96bil), which excluded a one-off 97 million euros gain on the settlement of an Rolls-Royce plc convertible bond. 

It estimated savings this year in the hundreds of millions of euros in purchasing costs. 

The company suffered last year from adverse foreign exchange and raw material effects of 517 million and 288 million euros, respectively – a combined effect that was only somewhat lower than the 844 million it racked up in 2006. 

BMW expects the foreign exchange headwinds would decline this year, with most major currencies practically fully hedged for 2008. 

“A spot price of US$1.50 per euro or more will not find its way on to our income statement,” chief financial officer Michael Ganal said in remarks prepared for a news conference. – Reuters  

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